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Home / Business

Carl's Jr wants to take big bite of NZ

By Christopher Adams
NZ Herald·
14 Dec, 2011 04:30 PM3 mins to read

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Actor and television host Padma Lakshmi appears in an advertisment for Carl's Jr. Burgers. Photo / Supplied

Actor and television host Padma Lakshmi appears in an advertisment for Carl's Jr. Burgers. Photo / Supplied

Restaurant Brands will open a Carl's Jr burger restaurant in every major urban centre in New Zealand, its chief financial officer says.

The NZX-listed firm has bought the rights to operate the American fast food chain in this country from United States-based CKE Restaurants, which owns the brand.

An existing franchisee, part-owned by former All Black Michael Jones, already operates two Carl's Jr stores in Auckland's Takanini and St Johns, and has rights to develop a limited number of further sites in the city.

Restaurant Brands said it had exclusive rights to develop the chain throughout New Zealand.

Chief financial officer Grant Ellis said the number of stores the existing franchisee was allowed to develop in Auckland was "not significant".

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Restaurant Brands would also develop stores in Auckland and would open its first Carl's Jr restaurant in the city by the middle of next year, he said.

"Where there's a major urban centre you'll see a Carl's Jr throughout the country."

Ellis said the speed of the roll-out would depend on the availability of sites.

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"It's not going to be a 10-stores-a-year kind of growth but it will certainly be more than one or two [a year]."

Ellis said the Carl's Jr stores that were already up-and-running in this country had proved successful.

The chain targeted "hungry young males" and fitted well into the New Zealand fast food market, he said.

The new business will sit alongside Restaurant Brands' three existing brands - KFC, Starbucks and Pizza Hut.

Discover more

Business

US burger chain in NZ franchise deal

13 Dec 09:33 PM

"The Carl's Jr product offering is very compelling," said Ellis. "From a differentiated burger point of view it certainly outperforms the competition."

Ellis said its main competitors would be the "usual suspects" - Burger King, Wendy's and McDonald's.

At Restaurant Brands' annual meeting earlier this year, chief executive Russell Creedy floated the idea of the company acquiring the rights to operate Taco Bell - a US fast food chain that specialises in Mexican-style food - in New Zealand.

Yesterday, however, Ellis said that idea was now "well on the back burner".

One analyst said Carl's Jr would gain more traction in the New Zealand market than Taco Bell, which would have been a more risky business to introduce to this country.

"Burgers are a concept that Kiwis are familiar with," the analyst said, adding there was little risk of Carl's Jr taking sales away from the company's KFC business.

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Paul Harrison, head of equities at BT Asset Management, said Restaurant Brands' existing businesses were "reasonably mature".

"[Carl's Jr] gives them a growth option without venturing offshore."

Ellis said the amount the company had paid to acquire the Carl's Jr brand was commercially sensitive, but "not a vast sum".

Meanwhile, Restaurant Brands released its third quarter sales result yesterday, showing total revenue had fallen 3.1 per cent on the same period last year to $71.9 million in the three months to December 5. Shares closed down 3c at $2.06 yesterday.

CARL'S JR

- Founded in Los Angeles in 1941.

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- Now has more than 1290 outlets around the world.

- Is the world's fourth biggest burger chain after McDonald's, Burger King and Wendy's.

- Specialises in "char-broiled" burgers with names like The Big Carl and Super Star with Cheese.

- Sides include deep-fried Chicken Stars and Chili Cheese Fries.

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